When Will St Barbara Limited (ASX:SBM) Breakeven?

We feel now is a pretty good time to analyse St Barbara Limited's (ASX:SBM) business as it appears the company may be on the cusp of a considerable accomplishment. St Barbara Limited, together with its subsidiaries, engages in the exploration, development, mining, and sale of gold. The AU$192m market-cap company’s loss lessened since it announced a AU$507m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$136m, as it approaches breakeven. As path to profitability is the topic on St Barbara's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for St Barbara

St Barbara is bordering on breakeven, according to the 4 Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$7.7m in 2025. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 100%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of St Barbara's upcoming projects, however, bear in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.1% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on St Barbara, so if you are interested in understanding the company at a deeper level, take a look at St Barbara's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

1. Historical Track Record: What has St Barbara's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on St Barbara's board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.